I ran the numbers and it isn't cheaper than a wide IC. So it is just easier to write a 100 dollar wide IC instead of 7 tight ones covering pretty much the same width...
Risk free iron condor
- Thread starter hurricane_sh
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I ran the numbers and it isn't cheaper than a wide IC. So it is just easier to write a 100 dollar wide IC instead of 7 tight ones covering pretty much the same width...
I have seen situations where someone inverted the spot with the strike, which brought my employer some $300k in a split second. I know of a case which changed the way Tokyo Stock Exchange operates where some trader accidentally inverted the price with the quantity, it happily passed all 11 safety systems and AI microservices cloud functional templates bullshit sold by programmers and resulted in an ~= $2B loss for the victim.
I also know how to make $5M or more in 10 seconds if the market is right (and will be at some time in the future).
So yeah, those things such as risk-free iron condor are possible. You don't even need to go that sophisticated.
I also know how to make $5M or more in 10 seconds if the market is right (and will be at some time in the future).
So yeah, those things such as risk-free iron condor are possible. You don't even need to go that sophisticated.
OK, I have found it. June IC on NFLX, 5 bucks spread you can sell for $5.4. Instant 8% gain!
It is probably mispriced and wouldn't go through, but if you look hard enough...
There's no way you can trade this at the same time... are those tradable prices at bid and offer or midpoints?
If I look now, the midpoint seems around 5, but again... I doubt you can trade it at that price. You might be able to work the 2 spreads seperately though...
Fat fingers are not exactly what I call a risk-free strategy. Of course do they happen from time to time... but that's just a big opportunity in it's own merits.
I'm sorry but saying something like that doesn't make any sense. Just because it's a lottery ticket doesn't give it any edge. That's like putting money consistently on 0 on the roulette table... hoping to hit it at one time. That's not a good strategy IMO.
And a 4-legged construction is expensive in fees as well...
For something like this to work, you need to have a better understanding of what a butterfly essentially is. And how it changes in value when x happens. For instance, most of the gain won't happen until it's got 1 month left. So with a 6 month or 1 year strategy you're going to have to wait a long time to potentially get something out of it.
And if you're spreading some of them out... even without overlapping strikes... you're just doing similar trades and paying more for it. In the end, only 1 might make money...
Butterflies are a vol trade... nothing more...
Never said anything about having an edge. OP wanted risk free, this is what you get almost risk free.
Good point about the little premium difference between 2 and 6 months. The only reason to go for longer term is that the stock has more time to come back to the midpoint. Also one can close the winning side earlier.
A note on the earlier quote, that was pre-open, so not really a valid quote. But that was risk free...
A note on the earlier quote, that was pre-open, so not really a valid quote. But that was risk free...
Ah come on @Pekelo... you're just yanking my chain right? You're better than clogging up threads with nonsense like this pre-open shit. That's for newbies, same like saying it's free money when in pre-open the offer is lower than the bid...
If you can't trade it, it's not a valid argument....
OK, let's put the theory to test. I sold 10 ctrs NFLX Oct IC for $2.37
177.5/180/180/182.5 so wing is $2.5 wide. My max. loss is $130 plus com. So it is risk 1 to make 15. But I have TA on my side too!!
The reason I sold this because the price is almost in the middle of the Bol. Bands very close to the SMA on the daily chart. A month ago a similar strategy would have paid off. I expect the same, the price moving up or down to the BB and bouncing back from it. I guess even if price doesn't bounce back as expected, if I close the wings timed correctly, I could avoid a loss.
I might be right or wrong, we shall see...
177.5/180/180/182.5 so wing is $2.5 wide. My max. loss is $130 plus com. So it is risk 1 to make 15. But I have TA on my side too!!
The reason I sold this because the price is almost in the middle of the Bol. Bands very close to the SMA on the daily chart. A month ago a similar strategy would have paid off. I expect the same, the price moving up or down to the BB and bouncing back from it. I guess even if price doesn't bounce back as expected, if I close the wings timed correctly, I could avoid a loss.
I might be right or wrong, we shall see...
If a mid shows a credit larger than than the maximum width of the condor, it still doesn't mean that you can actually get that credit. I highly doubt it.
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